This ridiculously low cap will drive jobs out of Ohio and leave low-income borrowers with less available options when facing a budget crunch.
Tim Miller, Communications Director, Center for Consumer Freedom

There are pieces of legislation currently before the Ohio legislature that would cap interest rates on payday loans at 28 or 36 percent per year. That translates into a fee slightly above $1 on a two-week $100 loan. Survey results released today by the Center for Consumer Freedom (CCF) show that less than 10% of respondents would be willing to give out a loan at the rate which Ohio legislators are proposing that the state caps short-term lending.

The new survey demonstrated that very few people would be willing to carry a loan with such stringent restrictions. When asked how much they would charge a complete stranger who wanted to borrow $100 for two weeks, just nine percent of respondents said $1.50 or less. Over 80% of respondents would still be unwilling to make the loan at $15 or less, the common rate for a payday loan of that size in Ohio.

"The reality of this ridiculously low cap is that no payday loan business will be able to survive. It will drive jobs out of Ohio and leave low-income borrowers with less available options when facing a budget crunch," said Tim Miller, Communications Director at the Center for Consumer Freedom. "This survey shows that almost nobody would be willing to lend money at the rate which Ohio legislators want to cap short-term loans."

Miller concluded, "If the legislature goes forward with this misguided proposal, they will leave borrowers stranded in debt, but with fewer and more expensive options to resolve it."

The findings are based on a telephone survey conducted among a national probability sample of 1,004 adults comprising 500 men and 504 women 18 years of age and older, living in private households in the continental United States. Interviewing for this survey took place between April 25th and April 28th, 2008.